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Insight former boss pockets $4m as EMEA slumps

Microscope contributor

Insight Enterprises has coughed up $4m (£2.4m) in severance pay to former CEO Rich Fennessey and hopes to have a new boss in place by the end of the year following a quarter in which the firm refused to call time on the recession in EMEA.

The reseller last night posted Q3 revenues of $970m (£584m), down 17% year-on-year and a 10% rise in profits from continuing operations to $7.3m (£4.4m) including one-off expenses.

The exceptional charges included the pay off for Fennessey - the boss that was moved on in the summer - of $2.5m net of tax, $560k ($346k net) for professional fees and costs related to the the trade credit statement remediation and litigation.

Just over 50 days in the interim role, CEO Tony Ibarguen, said he had met with senior management at the firm in all geographies and together they had identified areas where the company needed to "improve our execution".

"[Our leaders and team mates] have repeatedly talked about how the acquisitions, financial restatements and economic challenges of the past few years resulted in management attention being focused internally instead of on our clients and partners."

Sales in North America fell 19% to $686m but profits from operations went up 9% to $9.4m, helped by cost reductions taken last year and earlier this, as hardware, software and services revenues dropped 24%, 15% and 13% respectively.

In EMEA, sales fell 12% in US dollar while profits from operations were $1m down 82% year-on-year as Insight failed to hit internal targets for the third consecutive quarter due to ASP erosion and competition.

But the team drove sequential growth in hardware and software due to market share gains in public sector and mid-market, the company stated.

Ibarguen said: "We are not yet able to call a bottom to the economic and IT spending declines in EMEA.

"Despite the fact that we have performed reasonable well on the sales lines in this environment we have not had the flexibility to reduce our costs as aggressively as we have in North America," he added.

The UK reported an increase of 16% and 5% in software and services sales respectively but a 5% decline in shipments in the hardware category.

In the Asia Pacific region, sales went up 8% to $35.5m while earnings from operations were $912k.

The company continues to seek out a permanent replacement for Fennessey and Ibarguen said the board had "met with candidates" and were "working to hopefully conclude that by the end of the year."

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